Download 4.3.1 Nature of Procurement of Products

Bangkok Expressway Public Company Limited
Form 56-1
4. Business Operations of the Company
4.1
Nature of Services
Bangkok Expressway Public Company Limited (BECL) and Northern Bangkok
Expressway Company Limited (NECL) provide Expressway services, namely, the Si Rat
Expressway (Second Stage Expressway) and the Udon Ratthaya Expressway (Bang Pa-in Pak Kret Expressway) which connect to the Expressway network covering major areas in
Bangkok and the Vicinity, rendering it convenient for motorists to travel from the North of
Bangkok and the surrounding provinces to the South and the East without being required to
pass through the congested traffic in the downtown and also ensuring that motorists can
reach their destinations faster than using normal routes. The details of the Expressway
network connections are as follows:
Description
Length
(km.)
Constructed and
Operated by
1. Chalerm Mahanakorn Expressway (First Stage
Expressway)
(Bang Na - Din Daeng - Dao Khanong)
27.1
EXAT
2. Si Rat Expressway (Second Stage
Expressway)
38.5
BECL
3. Udon Ratthaya Expressway (Bang Pa-in - Pak
Kret )
32.0
NECL
4. Uttaraphimuk Elevated Way (Don Muang
Tollway)
28.1
Don Muang Tollway
Public Company
Limited
5. Chalong Rat Expressway (Ramindra - At
Narong and Ramindra - Outer Bangkok Ring
Road)
28.2
EXAT
6. Burapha Withi Expressway (Bang Na Chonburi)
55.0
EXAT
7. Kanjanapisek Expressway (Bang Pli Suksawad) and Highway No. 37 (Suksawad Bang Khun Thien Section)
35.1
EXAT
2.1 Urban Network (Prachachuen-PhayathaiBangkhlo-Asoke)
2.2 Suburban Network (Prachacheun-Chaeng
Watthana and Asoke-Srinagarindra)
Total length
244.0
4-1
Bangkok Expressway Public Company Limited
4.2
Form 56-1
Marketing and Competition
Target Customers and Characteristics
Target customers of the Chalerm Mahanakorn Expressway and the Si Rat
Expressway refer to those motorists who desire a convenient and rapid transportation or
who desire to shorten the traveling distance to their destinations as well as to avoid the
traffic congestion along the normal roads, which is a major problem in Bangkok. Target
customers by the types of vehicles using the Expressways in 2011 may be divided into
three categories, namely, four-wheeled vehicles; six-wheeled to ten-wheeled vehicles; and
more than ten-wheeled vehicles. The four-wheeled vehicle customers accounted for the
highest ratio of 97.61 percent, while the six-wheeled to ten-wheeled vehicle customers and
more than ten-wheeled vehicle customers represented 2.10 percent and 0.30 percent,
respectively. It was found that revenue was mainly derived from cash representing 76.98
percent, from coupons representing 0.96 percent and from Easy Pass representing 22.06
percent. In this regard, EXAT has launched the Electronic Toll Collection system (Easy
Pass) for the Chalerm Mahanakorn Expressway, the Chalong Rat Expressway and the Bang
Pli - Suksawad Expressway since 31 January 2010, and for the Si Rat Expressway since 25
July 2010. The traffic volume using the Expressways may be described by areas as
follows:
Description
Average Traffic
Volume
(trips/day)
1. Chalerm Mahanakorn Expressway (First Stage
Expressway) (1)
(Bang Na - Din Daeng - Dao Khanong)
%
349,710
23.30
2.1 Urban Network (Prachachuen-Phayathai-BangkhloAsoke)
308,566
20.56
2.2 Suburban Network (Prachacheun-Chaeng Watthana
and Asoke-Srinagarindra)
313,504
20.89
3. Udon Ratthaya Expressway (Bang Pa-in - Pak Kret )
52,813
3.52
4. Uttaraphimuk Elevated Way (Don Muang Tollway) (2)
80,000
5.33
5. Chalong Rat Expressway (Ramindra - At Narong and
Ramindra - Outer Bangkok Ring Road) (1)
154,199
10.27
95,257
6.35
146,740
9.78
2. Si Rat Expressway (Second Stage Expressway)
6. Burapha Withi Expressway (Bang Na - Chonburi) (1)
(1)
7. Kanjanapisek Expressway (Bang Pli - Suksawad) and
Highway No. 37 (Suksawad-Bang Khun Thien Section)
Total Traffic Volume
Remarks :
(1)
(2)
1,500,789
100.00
Source: Expressway Authority of Thailand during 1 January - 31 December 2011.
Source: Thansettakij Newspaper, Issue for 26 October 2011.
Given the fact that the provision of Expressway services is considered a form of
public service, target customers of the Expressway Systems are broad depending on their
transportation purposes. In this respect, the revenue of the Expressway Systems will not
rely on any particular group of customers.
4-2
Bangkok Expressway Public Company Limited
4.2.1
Form 56-1
Marketing Policy and Circumstances
Marketing Strategies
The marketing highlight is that the Si Rat Expressway is designed to
respond to the transportation needs through the Expressway network which
connects to and covers major areas in Bangkok, whether from the Chalerm
Mahanakorn Expressway and the Si Rat Expressway, as well as the Chalong Rat
Expressway (Ramindra - At Narong) which cover the areas from the North to the
South and from the West to the East of Bangkok. In addition, the Third Stage
Expressway, Southern Route S1 (Bang Na - At Narong), connecting to the Burapha
Withi Expressway (Bang Na - Chonburi), and the Chalerm Mahanakorn
Expressway and the Chalong Rat Expressway, renders the service of the
Expressway Systems to become more complete for users to reach their destinations
more conveniently and rapidly than using at-grade roads.
The marketing disadvantage is the physical limitation which prevents the
release of traffic around the Expressway exits during rush hours, which depends on
the traffic on at-grade roads, representing an uncertain factor beyond the Company’s
control. However, the Company continuously cooperates with traffic police in police
stations of such areas to provide assistance in releasing traffic flow, and secures the
flow of the traffic volume in the Expressway Systems by improving various on- and
off-ramps to facilitate customers with more convenience, time-saving and better
quality of living in their commute in the downtown. Customers should then
appreciate these benefits over price factor.
In view of various marketing strategies, the Company has proceeded as
follows:
1) Expressway Route and Network for Service (Products)
1. The prime location and connections to major roads in the city allow the
Expressway network to respond to the transportation needs of motorists to
reach their desired destinations. In this regard, the Company has improved
the quality of the routes and its services and given priority to the customers’
needs, which will be integrated as key strategies to efficiently accommodate
the traffic volume flowing in the system.
2. The feasibility study on improvement of the on- and off-ramps of the
Expressways serves as another measure to facilitate the traveling and to
continually maintain the quality of the Expressways in terms of engineering
safety to meet international standards.
3. In order to improve the services to accommodate more motorists, in 2011,
the Company increased the number of toll booths at Hua Lamphong Toll
Plaza and Rama 9 Toll Plaza, which were opened for service on 17 March
2011 and 11 April 2011, respectively, to accommodate the increasing traffic
volume, as well as construction of flyover crossing the Si Rat Expressway
and Ngam Wong Wan Road, which was opened for service on 11 April
2011, so as to facilitate motorists heading the Government Complex
Commemorating His Majesty the King’s 80th Birthday Anniversary on
Chaeng Watthana Road, and motorists heading to the North.
4. The study on new routes in response to the urbanization in the future,
particularly in Bangkok, as well as the study on traveling behavior of
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Bangkok Expressway Public Company Limited
Form 56-1
motorists are conducted to prepare for the expansion of the scope of the
Expressway services, and serve well as additional channels of services in
response to needs of the motorists in the future.
The Company also plans to improve signboards regarding the
Expressway usage on the at-grade main road and various alleys in Bangkok
and its surrounding provinces so as to facilitate motorists to have confidence
to access the Expressways. To this effect, the Company focuses on
introducing such landmarks adjacent to the on- and off-ramps of the
Expressways on the website and various public relations media to ensure
that customers, as the Expressway users, would travel more conveniently
and rapidly.
2) Toll Rates (Price)
1. Price or toll rates are agreed upon and specified in the Agreements,
including the calculation for revisions of toll rates ahead of time between the
contractual parties since the execution of the Agreements for the respective
Projects. The rates are considered reasonable and based on the feasibility
study for investment of each Project. Under the Second Stage Expressway
Agreement and the Bang Pa-in - Pak Kret Agreement, toll rates shall be
revised at every five years interval in accordance with changes in Consumer
Price Index of Bangkok as announced by the Ministry of Commerce, which
serves as the basis of calculation for the intrinsic value of the toll rates
during the given periods under the Agreements.
2. The Company continues to provide discount on tolls in 2011 on certain
routes for a limited period of time to attract motorists to increasingly use the
Expressway services, especially such routes with connections between the
Expressway Systems, e.g., Rama 9-1 Toll Plaza (from the Chalong Rat
Expressway to enter Sector D of the Second Stage Expressway) and At
Narong 1 Toll Plaza (to Bang Na), as well as the route of the Udon Ratthaya
Expressway. This should facilitate motorists who travel a long distance to
enjoy more discount than general motorists.
3) Distribution Channels (Place)
1. Users of the Chalerm Mahanakorn Expressway and the Si Rat Expressway
may choose to use the Expressway services from various on- and off-ramps
covering major areas in Bangkok throughout the total distance of 65.6
kilometers, both urban and suburban. Expressway users shall pay tolls at
the on-ramps of toll plazas, totaling 48 locations, 18 toll plazas of the
Chalerm Mahanakorn Expressway (e.g., Din Daeng, Bang Na, Dao
Khanong, Sukhumvit, Rama 4 Toll Plazas, etc.) and 30 toll plazas of the Si
Rat Expressway (e.g., Asoke, Rama 9, Srinagarindra, Yommaraj, Surawong,
Hua Lamphong, Khlong Prapa, Yan Phahon Yothin, Prachachuen, Rama 3,
etc.).
2. Traffic volume in the Chalerm Mahanakorn Expressway (First Stage
Expressway), the Si Rat Expressway (Second Stage Expressway) and the
Udon Ratthaya Expressway (Bang Pa-in – Pak Kret Expressway) in 2011
may be categorized by urban and suburban, which equals 64:36.
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Bangkok Expressway Public Company Limited
Form 56-1
Average Daily Traffic Volume for Urban and Suburban
(The First, the Second Stage Expressway Systems and the Bang Pa-in – Pak Kret Expressway)
(Unit: Trips/Day)
trips/day
1,000,000
Urban
Suburban
Total
800,000
2007
649,866
334,582
984,448
600,000
2008
608,687
315,985
924,672
400,000
2009
621,503
331,005
952,508
2010
630,032
344,131
974,163
2011
658,276
366,317
1,024,593
200,000
0
Urban
Suburban
3. Payment of Tolls for 2011
-
Users of the Chalerm Mahanakorn Expressway and the Si Rat
Expressway may pay tolls in cash, or use the Electronic Toll Collection
system (Easy Pass).
-
Users of the Udon Ratthaya Expressway shall pay tolls at the on-ramps
for the inbound direction and at the off-ramps for the outbound
direction. There are five on-ramps and five off-ramps, and tolls must be
paid in cash only.
4. Electronic Toll Collection System
The Company, in association with EXAT, introduces the Electronic Toll
Collection system in the toll collection, in order to serve as a new channel for
motorists and facilitate and speed up the toll payment at the front of the Toll
Plazas during rush hours, as well as accommodating the increasing traffic
volume in the future. In this regard, EXAT has launched the Electronic Toll
Collection system (Easy Pass) for service on 31 January 2010 for the Chalerm
Mahanakorn Expressway (First Stage Expressway), the Chalong Rat
Expressway (Ramindra - At Narong - Outer Bangkok Ring Road) and
Kanjanapisek Expressway (Bang Pli – Suksawad), and on 25 July 2010 for the
Si Rat Expressway (Second Stage Expressway). After the opening for service
of Easy Pass for the Si Rat Expressway (Second Stage Expressway), the service
then covers all networks, as a result, in December 2011, the average volume of
vehicles using Easy Pass on working days for the Chalerm Mahanakorn
Expressway and the Si Rat Expressway is approximately 281,126 trips per day,
representing 26 percent of the four-wheeled vehicles. In addition, the
introduction of Easy Pass also enhances the efficiency of the toll collection
during rush hours, that is, the existing toll collection in cash accounts for 450
trips per hour, when using Easy Pass, it is presently found that Easy Pass is able
to collect tolls at a maximum rate of 921 trips per hour, compared with the
maximum toll collection capacity based on Easy Pass at 1,200 trips per hour.
Furthermore, the Company continuously and regularly cooperates with EXAT
to enhance the efficiency of the toll collection during rush hours.
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Bangkok Expressway Public Company Limited
Form 56-1
Any Expressway users who wish to use Easy Pass service may purchase
Easy Pass Cards at Toll Plaza buildings during 05:00 – 22:00 hours, or
Customer Service Center at Bangkok Expressway Public Company Limited,
Asoke - Dindaeng Road, during normal office hours from 09:00 -17:00 hours.
Moreover, the Company arranged for the Easy Pass Fast Service, including
film cutting service for Easy Pass installation and testing after trouble-shooting,
whereby the Expressway users are able to bring their cars to use the services at
the Easy Pass Fast Service, free of charge, at Bangkok Expressway Public
Company Limited, Asoke - Dindaeng Road, during the office hours from 09:00
- 17:00 hours.
4) Sales Promotion and Public Relations (Promotion)
In the sales promotion activities, the Company provides discount on tolls on
certain routes within a limited period of time, aimed at attracting target
customers to continue to use the Expressway services and eventually become
regular customers. In 2011, the Company provided discount at the connection
from the Chalong Rat Expressway to Sector D of the Si Rat Expressway at
Rama 9-1 Toll Plaza (Si Rat) and at the connection from the Chalong Rat
Expressway to the Chalerm Mahanakorn Expressway at At Narong 1 Toll Plaza
only on the route to Bang Na, including the Udon Ratthaya Expressway of the
Subsidiary, which continued to provide discount to motorists.
Furthermore, during the remarkable festivals, such as, Songkran Festival
and New Year’s Festival, the Company also holds activities promoting the use
of the Expressways for motorists by cooperating with EXAT to distribute
souvenirs to motorists, including arranging for motorist service points at the
destination toll plazas, which demonstrated our positive image and relationship
with motorists under the theme that we provide the best services to customers
throughout the routes.
The Company, as a private company that provides the Expressway services,
responds to the government policy to promote the “No Phone While Driving”
and “No Drunk Driving” campaigns through the “Drive Safety” activities, as
well as raising an awareness of energy concerns in traveling under the highpriced oil circumstances. The Company also implemented public relations to
convince target customers of the convenient, rapid, economical and safe usage
of the Expressways; various quality services on the Expressways; and various
sales promotion of the Company, such as, discount on tolls, connections
between the Expressways and various routes to facilitate motorists.
The channels of public relations used by the Company to introduce new onand off-ramps, and to disseminate information, news, discount on tolls, and
activities comprise documentary programs on radio and television, radio spot,
leaflets, signboards on the Expressway, and our website to introduce
Expressway routes to various destinations, including Si Rat bimonthly
newsletters as a medium for sharing information and news between the
Company and motorists. In 2011, the Company improves the frequency of our
customer relations activities with the existing customers to educate, satisfy and
attract new customers to use the services more, as well as organizing various
social activities throughout the year to ensure the positive attitude of our
services towards customers and society.
4-6
Bangkok Expressway Public Company Limited
4.2.2
Form 56-1
Industry and Competition
In 2011, despite the economic recession in European countries and USA,
problems from the natural disaster in Japan, the impacts from the flood crisis
nationwide, along with the consequences of the political demonstrations in the
previous year, these occurrences in no way affected the economic growth of the
country. In 2011, the number of new cars registered was high, the traffic volume
using the Expressways then continuously increased, namely, on the whole, it
increased by 10.65 percent as compared to 2010.
According to the information of the Department of Land Transport, in 2011, the
number of new cars registered (inclusive of all types of cars) in Bangkok area is as
high as 413,508 vehicles, which is more than that of 2010, namely 373,717
vehicles, due to the positive economic growth rate from January to September 2011;
and the positive factor from the Council of Ministers’ resolution under the
Government’s tax refund campaign for first-time car buyers amounting to Baht
100,000, effective 1 October 2011, thereby bringing the total accumulated number
of cars in Bangkok to 4.08 million vehicles, despite the impacts from the flood
crisis giving rise to damage to a certain number of vehicles. In 2011, the average
speed of cars during morning and evening rush hours in the inner Bangkok area is
presently at 18 kilometers per hour, and in the middle Bangkok area is at 29
kilometers per hour; while in the outer Bangkok area is at 36.79 kilometers per
hour, and given the increased volume of vehicles, the average speed was lower
accordingly (source: Daily News Newspaper, Issue for 15 September 2011).
In view of the indirect competition through other public transport systems,
despite the services of the Bangkok Mass Transit System of the Bangkok
Metropolitan Administration (BTS), including its Extension, and the metro of the
Mass Rapid Transit Authority of Thailand (MRTA), the volume of vehicles using
the Expressways did not reduce because the majority of customers of these
transportation systems previously used the public transport systems and they are in
a different group to those using the Expressway Systems. Moreover, the total
distance for service of the mass transit railway system covers only 79 kilometers,
divided into 31 kilometers for BTS (including the extension of Silom Line and
Sukhumvit Line), 20 kilometers for Metro and 28 kilometers for Airport Link,
covering merely certain part of Bangkok. According to the following up on the
impacts upon the volume of vehicles using the Expressways due to the opening for
service of the Airport Link since August 2010, it did not materially affect the
volume of vehicles using the Expressways since the number of service users was
relatively low. As for the Bangkok Mass Transit System for the Extension of
Sukhumvit Line (On Nut – Bearing), at a distance of 5.25 kilometers, which had
been opened for service free of charge from 12 August 2011 to 1 January 2012, it
was found that it slightly affected the volume of vehicles using the Expressways,
namely, at Bang Na Toll Plaza and Sukhumvit 62 Toll Plaza.
However, three MRT projects are pending construction, namely, the Red Line
Project: Bang Sue-Taling Chan, for a distance of 15 kilometers, which would be
opened for service in 2015; the Purple Line Project: Bang Yai-Bang Sue, for a
distance of 23 kilometers, which would be opened for service in 2015; and the Blue
Line Project: Bang Sue-Tha Phra and Hua Lamphong-Bang Khae, at a total distance
of 55 kilometers, which would be opened for service in 2015, including the
Bangkok Mass Transit System for the Extension of Silom Line: Tak Sin-
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Bangkok Expressway Public Company Limited
Form 56-1
Phetkasem, for a distance of 5.3 kilometers, which is in progress and carried out by
the Bangkok Metropolitan Administration, and it was expected to be opened for
service by the end of 2012. According to the analysis, these projects under
construction would allow the motorists to avoid at-grade roads to increasingly use
the Expressways, and when such projects are opened for service, the Company
would closely monitor the impacts.
4.3
Procurement of Products and Services
4.3.1
Nature of Procurement of Products
EXAT is an authority responsible for the construction of expressways to provide
facilities and rapid traffic and transport in respect of projects in Bangkok and
Vicinity. EXAT invites interested parties to participate in the preparation of
proposals or accepts bids, the Company then conducted a project feasibility study
and submitted proposals or bids to be awarded the project, subject to appropriate
return and conditions.
The Expressway Projects under the Second Stage Expressway Agreement, the
Bang Pa-in - Pak Kret Expressway Agreement and the Agreement for Extension of
the Second Stage Expressway (Sector D) are implemented on a BTO basis.
According to the essence of the Agreements, EXAT shall have the duty to
determine the characteristics of the Expressways, Expressway routes and areas to be
used for construction and arrange for land expropriation for delivery to the
Company for construction within the time specified in the Agreements. Thereafter,
the Company would carry out construction in accordance with the designs approved
by EXAT, subject to the supervision of the quality of construction work by EXAT’s
Consulting Engineer, Independent Certification Engineer and Independent Design
Checker. Upon completion of the construction, the Independent Certification
Engineer shall inspect the work and issue Certificate of Completion to evidence that
the construction work is complete in accordance with the specified standards and is
ready for service, at which time, the Company shall be entitled to obtain toll
revenue under the conditions of the Agreements.
In the previous constructions, the Company engaged project managers to carry
out construction and operate the Expressway Projects on a lump sum turnkey basis
and on a subcontract basis. This was due to the fact that the Expressway Projects
are large scale projects which may sustain cost overrun issues and delayed
completion of the construction. The lump sum turnkey engagement is intended to
prevent such risk. In the engagement of project managers, the Company will select
specialists with experience to act as project managers and construction contractor to
ensure the accomplishment of quality work on time.
4.3.2
Environmental Impact
The Company is always environmentally aware. In the construction of the
Expressways under the Second Stage Expressway Agreement and the Bang Pa-in Pak Kret Expressway Agreement, the Company and the Subsidiary shall comply
with the measures to prevent pollutions in accordance with the regulations of the
National Environment Committee and other relevant laws, which form an integral
part of the Agreements. The Company and the Subsidiary implemented the
measures and procedures as appropriate for the construction carried out in the urban
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Bangkok Expressway Public Company Limited
Form 56-1
areas with high populations. In so doing, the Company employs the Segmental Box
Girder construction technique which allows it to complete the construction faster
than other techniques in those days, so as to prevent any impact to nearby
communities and affect the at-grade traffic at the least possible extent during the
construction. Furthermore, the Company has no records of committing any
environment related offenses.
Even during the course of the current operation of the Expressway Systems, the
Company remains concerned about the quality of life of staff, motorists and
communities surrounding the Expressways. Since 2008, the Company has improved
its internal procedures to conform to the environmental requirements to apply for the
certification of ISO 14001 : 2004 Environmental Management System, and
eventually obtained such certification from SGS (Thailand) Limited on 14 November
2008, and continued to review for renewal of the certificate of such Environmental
Management System. The Company’s environmental policy is to become a leading
company in Thailand which provides the Expressway services and has the
management system to facilitate the public transport, subject to good corporate
governance principles and corporate social responsibility. The Company is
committed to ensuring the environmental management in line with the following
guidelines:
1. To give priority to pollution prevention and control by managing and
maintaining the Expressways to meet international standards and keeping in
mind the environmental impact on motorists, staff and communities;
2. To instill and encourage our staff with an awareness of efficient use of energy
and natural resources;
3. To comply with the environment-related laws and regulations;
4. To review the purposes and goals for continued improvement of the
environmental management system;
5. To communicate our environmental policy to the public and all parties
concerned.
In 2011, the Company has continued to maintain the ISO 14001 : 2004
Environmental Management System, by following up of possible environmental
issues, as well as optimizing the use of natural resources through energy
management measures. In 2011, the Company has continued to install the
Overhead sign lighting at the Si Rat Expressway by using the Light-emitting Diode
or LED 30 watt technology instead of the existing using 250-watt Metal Halide
technology in order to save energy, in replacement of the existing nonrenewable
energy, not to mention the LED technology’s qualification of longer life time,
thereby causing decrease in repair and maintenance of the signboard lighting;
alleviating the congested traffic problem on the Expressways as well as minimizing
air pollution and global warming.
In terms of environmental management regarding impact of noise from traffic
on the Expressways upon nearby residents, the Company has prevented and
minimized noise pollution from traffic on the Expressways by changing type of
noise barrier from GRC (Glassfiber Reinforced Concrete) of dispersive type to
AMB (Aluminum Noise Barrier) of absorptive type to improve and enhance the
efficiency for minimizing noise pollution from traffic on the Expressways.
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Bangkok Expressway Public Company Limited
Form 56-1
For the purpose of safety, the Company has been introducing the remote
lighting control system for installation on the Expressways since the previous year
to ensure more safety for motorists in case of bad weather, such as, heavy fog and
while the automatic lighting system has not yet activated, the lighting system can be
controlled remotely from the Second Stage Expressway Control Center as
necessary.
In 2011, the Company has continued to provide training for staff, as well as
executives, on knowledge and techniques for environmental management in
accordance with the ISO 14001 : 2004 Environmental Management System, as well
as arranging for various activities to raise an awareness of environmental protection
in our organization and participating in social contributions with the communities
nearby.
With respect to the environmental protection from the flood crisis, the Company
laid down the strict measure for safe storage of materials and chemicals at specific
storage places; they are lifted to higher ground to prevent them from possible flood.
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